US identity fraud $45.3 bln in 2007, but declining
NEW YORK, Feb 11 (Reuters) - Identity theft remains a major problem, with Americans losing $45.3 billion in 2007, but a drop in fraud cases suggests that more consumers and businesses are winning the battle against criminals, a new report shows.
Losses declined 11 percent from about $51 billion in 2006, according to the fourth annual study by Javelin Strategy & Research, released on Monday. The average loss fell 6 percent to $5,574 from $5,920.
The study also said that as banks and retailers beef up their in-store and online security systems, frauds are resorting more to the phone and the mail to prowl for victims.
"The good news is we're seeing something of a leveling off," said James Van Dyke, president and founder of Javelin, in an interview.
"Criminals are playing the old cat-and-mouse game. There has been some strengthening of protections against Internet identity fraud, and they have to find other channels."
Last year saw one of the largest breaches, a theft of data from 45.7 million credit and debit cards reported by discount retailer TJX Cos (TJX.N), which owns T.J. Maxx and Marshalls.
According to Pleasanton, California-based Javelin, 8.1 million adult Americans, or one in 28, learned last year that criminals committed fraud with personal data such as credit card or Social Security numbers.
That's down from 8.4 million in 2006 and 10.1 million in 2003. But it still means many people were at risk of having their accounts drained, or credit card bills soar, without knowing it was happening.
Though fraud from in-store transactions remains the most common form of theft, theft by phone or mail soared to 40 percent of fraud cases from 3 percent, the study said.
Phone fraud often involved criminals' use of Voice over Internet Protocol, or VoIP, to make cheap calls from anywhere in the world to trap victims.
By geography, fraud risk was lowest in New England and the Plains states, and highest in California, Illinois, Idaho, West Virginia and Delaware, the study said.
Adults between the ages of 25 and 34, African-Americans and people who make more than $100,000 were among the most common victims.
Younger consumers between 18 and 24-years-old had been among the most victimized groups in 2006, but fared better in 2007 after putting more fraud alerts on credit reports, the study said.
More good news came in a 21 percent decline to $14.7 billion in new account fraud, where criminals use stolen data to open accounts.
Such fraud is the toughest to detect and the most upsetting to victims, and takes the longest to resolve, Javelin said. Fraud in existing accounts fell 6 percent to $30.6 billion. Continued...
